You have logged in countless hours – and poured your blood, sweat and maybe even buckets of tears into a venture you thought would be a hit. All the relentless networking, meet-ups and connections have proven to be dead-ends for your all-in try as a Sole Trader.
You’ve put up the good fight, but selling your business is now vital to your future happiness (and possibly the road back from insolvency). That said, don’t let the harsh reality send you into panic mode. Before you start humming Frank Sinatra’s “My Way,” and rushing to sell to the fastest bidder, as a self-employed Sole Trader there are several items you need to address.
If you have other elements to your venture such as a partner, along with binding contracts of service or fulfillment, it is strongly advised to seek out qualified contract law solicitors to be sure all the bases are covered.
The Final Check List
When your business has turned itself upside down, you just can’t walk away. There are certain steps to take, and regulations that need to be complied with. Due to the many UK laws created for the protection of employees and other concerned parties of a business sale, you may want to find and compare lawyers to ensure the best possible actions are taken during the initial stages.
The following are just a few basic steps, as a Sole Trader, to which you must adhere in order to dissolve a business:
1. Protection of Employment Rules – When you sell your business, there are legal responsibilities to any staff you may employ. Anyone who works for you must be told:
- When and why you’re selling your business.
- The redundancy terms or relocation packages, if necessary.
- Whether or not your business is changing ownership. If so, the employees may be protected under the Transfer of Undertakings (Protection of Employment) regulations (TUPE).
TUPE applies to employees of businesses operating in the UK. The mainstay is that the business could have its head office in another country, but the part of it that’s transferring ownership must be in the UK.
Also, the size of the business doesn’t matter. To make sure whether TUPE applies to the selling your business and transfer, contact the Advisory, Conciliation and Arbitration Service (ACAS) directly for more details, or watch the following video covering the regulations of TUPE.
2. Settling Your Taxes – You must also finalise any tax affairs of your business. You will need to send in a Self-Assessment Tax Return by the deadline to HM Revenue and Customs (HMRC).
3. Consult and Inform – Selling your business in the UK also requires Consulting and Informing. This is where, before a transfer of ownership happens, employers must tell the trade union or employee representatives:
- That the transfer is happening, when it’s happening and why.
- How the transfer will affect them.
- Whether there will be any reorganisation.
- How many agency workers they’re using and what types of work they are doing. (Employers can be penalised if they don’t comply.)
4. Ending Your Lease – If you are a brick and mortar store, you must take steps to breaking your commercial property lease early. Usually, the lease continues until the end date, unless you have included a ‘break clause’ – a stipulation that is agreed upon by both the landlord and tenant, that the term can be ended early without anyone facing a penalty.
Although your dreams of being your own boss may have been temporarily derailed, don’t despair. Realistically, many entrepreneurs face this reality, many times over. It’s the true testament of a leader when you can get back up, brush yourself off and keep pushing ahead to the next venture.